The Journal. - The Escalating Crisis at the Strait of Hormuz

Episode Date: March 12, 2026

The shutdown of the Strait of Hormuz has triggered a global economic disruption and created a major military and political challenge for the Trump Administration. WSJ's Jared Malsin explores the militarization of the strait, the options for its reopening and the risks of a prolonged closure of the world’s most important energy-transport route. Jessica Mendoza hosts. Further Listening: - Will Gas Prices Go Up Because of the Iran War? - The Global Scramble for Patriot Missiles Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Breaking news now in the war with Iran. Iran's new supreme leader, Ayatollah Mataba Hamani, has issued his first statement. Today, Iran released a statement that it said was from its new supreme leader, saying that the Strait of Hormuz must remain closed. So a defiant statement there read out by a TV presenter, because as you mentioned, of course, we still have not seen him. The message marks 10 days since Iran threatened to attack any ship trying to cross the strait, which is a critical. shipping route for oil internationally. This is the largest oil supply disruption in history, meaning it is causing a global economic disruption that will likely be felt for some time.

Our colleague Jared Malson is a Middle East correspondent for the Wall Street Journal. The Strait of Hormuz usually handles about one-fifth of the world's oil. That has contributed to a surge in oil prices worldwide, which pushed past $100,000. a barrel this week. And that's going to have all kinds of knock-on effects in terms of the price of gas in the U.S. and all over the world. So there are all kinds of second and third order economic effects that are going to happen as a result of this. So incredibly far-reaching consequences, all focused on this one kind of body of water. Exactly. Why is Iran doing this?

Why is it so focused on the Strait of Hormuz? So Iran is doing this because it cannot defend itself in a conventional sense against the Israeli and U.S. attack that is going on right now. They are by far the militarily weaker party in this conflict. And so what they're doing instead is in retaliation for the U.S. and Israeli bombing campaign, they are trying to impose economic costs on the U.S., on the West in general, and on the world at large. Is there any sign that the Strait is going to be safe for passage any time soon? In a word, no. What we're reporting is that the United States and its partners have no viable way of reopening the Strait of Hormuz while there is an active conflict going on. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Thursday, March 12th.

Coming up on the show, why it's so hard to reopen the Strait of Hormuz. This episode is brought to you by Vokeswomen. Want to go electric without sacrificing fun? The Volkswagen ID4 is all-electric and thoughtfully designed to elevate your modern lifestyle. It's fun to drive with instant acceleration that makes city streets feel like open roads. Plus, a refined interior with innovative technology always at your fingertips. The all-electric ID4. You deserve more fun.

Visit vw.ca to learn more. SuvW, German engineered for all. If you're trying to get through the Strait of Hormuz today, what obstacles would you be facing? So the Strait of Hormuz is a narrow body of water between 20 and 25 miles across, and the Iranians have explicitly said that any ships going through there could be struck with drone and missile strikes. And what we've seen is the Iranians attack a series of ships. Iran attacking the flow of mid-east oil, at least six ships. targeted in the last 24 hours. There were a couple more today in the last 24 hours near Iraq,

where you have these very dramatic images of ships at sea on fire. A Thai cargo ship attacked three crew missing, one of three vessels struck trying to enter the Strait of Hormuz. And so the Iranians have already struck a series of commercial ships, and they are signaling that anyone who tries to run the strait will be attacked. Iran pledged it won't hold back. We will never allow even a single liter of oil to pass through the Strait of Hormuz

for the benefit of the United States, the Zionists, or their partners. And Iran has a number of weapons it can use against vessels trying to cross the strait. Among them, drones. They've used very effectively these one-way attack drones. One of those drones is called the Shahid. It's sort of world-famous now.

as they exported them to Russia, who used them very effectively in the war in Ukraine, sending these kind of swarms of drones that are very hard to defend against. They fly at a low altitude, and in general, these pose a threat to civilian shipping. It's just very hard to defend against them. And for civilian oil tankers, there are civilian ships, they're commercial ships that are not set up to defend themselves. Another deadly weapon Iran could use are naval mines. mines, mines deployed under the water, what Iran is saying they're planting in the Strait of Hormuz.

They have a huge stockpile of them, according to military analysts, and they're obviously hard to detect. There are objects that lurk under the water there, and as a result, de facto, it would pose a huge threat to shipping if the Iranians deploy even a small number of them. It would only take one mine hitting one ship for that to cause a huge disaster, both environmentally, economically, and otherwise. The White House has said that the U.S. has destroyed many ships in Iran's Navy already. Does the country have other vessels that the U.S. hasn't yet destroyed? That's right.

So the Americans have obviously gone on the offensive against the Iranian Navy, sinking something like 60 of their ships. What we understand is that those are mostly the larger ships in the Navy. and it doesn't include this so-called mosquito fleet of smaller fast attack ships that the Iranians have. Mosquito fleets, drones, close-range missiles. While they're not as sophisticated as what the U.S. has in its arsenal, they're all nimble technologies that can have an outsized impact.

It's part of this question of the sort of asymmetric economics of this war where the Iranians can use these smaller or cheaper weapons. to cause a lot of damage. And their whole strategy is predicated on this idea of imposing costs on the other side. The aerial drones cost somewhere in the range of tens of thousands of dollars. The Trump administration was using multi-million dollar air defenses in some cases to shoot them down or try to shoot them down. Same with these small boats.

It only takes one to blow up an oil tanker. You can see these images of ships on fire in the Persian Gulf. in the Persian Gulf right now as we speak. It only takes one of those images to cause panic and anxiety in the oil markets and to scare away shipping lines, oil companies, and governments in the region from even attempting to send oil through the strait.

One potential answer is sending the U.S. Navy to escort ships as they cross the strait. That's something President Trump has brought up as recently as Monday. But when the time comes to U.S. Navy and his partners will escort tankers through the strait if needed. But it hasn't happened yet. What we understand from our reporting is that the military and the Department of Defense are not planning to do it right now,

as long as there's an active conflict going on. What we've been hearing from our sources is that it's just too dangerous. Sending the U.S. Navy or an Allied Navy to escort these ships would be putting them in harm's way. And it would just be very, very difficult to keep these convoys of ships safe. Right now, the U.S. Navy has a lot of its ships and other assets tied up in those strikes. It would have to divert some of those ships for this purpose. And what we understand from defense officials and from analysts is that it might even take multiple military ships for each civilian ship just to keep them safe. They would have potentially seconds to respond to incoming fire from Iran.

which is why they're just not going to try it right now. So if U.S. Navy escorts aren't a feasible option right now, what others are there for ships that need to cross while the war is ongoing? There's a few daredevil shippers where they're willing to adopt the risk and try to run through the strait. But for the most part, they're just sitting it out. What we have heard from everyone who is following this situation, oil analysts, shipping industry people, military analysts, is that there's really only two options.

It's either these military convoys or a ceasefire. And for a full resumption of normal traffic, meaning more than 100 ships a day crossing through the strait, you would need a cessation of hostilities along with an explicit sort of guarantee from the Iranians that they're not going to shoot at these ships because it's just too risky. There's lives at stake. There's real money at stake. And for these shipping companies and oil companies, they're just not going to risk it. Yesterday, Trump said that ships should use the strait.

He also said that the strait is in, quote, great shape. Meanwhile, with about 1,000 commercial ships and oil tankers trapped in the Persian Gulf, there's growing pressure on oil and energy markets. And many countries are desperate for a solution. What have you heard from talking to oil executives, specifically from Persian Gulf nations? What is their biggest fear right now? The chief executive of Saudi Aramco, that's the Saudi state oil company, and one of the largest companies period in the world,

said that a prolonged closure of the Strait of Form moves would cause catastrophic consequences for the world's oil markets and severely disrupt the world's economy. Those consequences are already rippling out from the Persian Gulf across the world. That's next. If oil can't get out through the Strait of Hormuz, it creates huge problems, not just for countries looking to buy that oil, but also for oil producers in the region. So for countries in the Persian Gulf, there is a sort of deadline on this, where they have to get a lot of this oil out or else they are going to have to continue to cut production. A lot of these countries, Iraq, Saudi Arabia, Qatar, they've already cut production. But,

But there's a race to get the oil out before storage fills up. And what we understand is that Saudi Arabia, for example, has about two weeks before it'll run out of storage. You just have to imagine, you know, just like a huge hose. And if you step on the hose, there's going to be a buildup behind that. So that's the dynamic right now. Is there any other way to get oil out of the Gulf right now? So aside from the Stradivormuz, there are two pipelines that can get Gulf oil. to market. One is the east-west pipeline in Saudi Arabia that goes to the port of Yanbu

on the Red Sea. And then there's another smaller pipeline in the United Arab Emirates that goes to the port of Fujaira that's on the Arabian Sea. So these two pipelines can relieve some of the pressure, but it is not a total workaround. As of today, the price of oil is hovering around $100 a barrel, and oil futures are above 100. To try to make up for the oil that's stuck in the Gulf, the International Energy Agency said yesterday that it would tap into a global reserve. This is a release of this strategic reserve that the International Energy Agency has. So this is a group of nations that together control this reserve.

They are releasing 400 million barrels of oil. And that is more than double the largest. use of the reserve, which was in 2022 after the Russian invasion of Ukraine. But it still doesn't seem like it's enough to quell market fears, as you were saying. No, and we're seeing that today with the price of oil still rising in spite of that announcement. So you're seeing that in spite of these emergency measures, prices are surging. Because there's just no way around the fact that the Persian Gulf is critical to the world's supply. On Fox News, U.S. Energy Secretary Chris Wright said that this strategic release of oil should

cover the global markets for about four months. How long will that last us? And what is your prediction about when this Gulf traffic will resume? Well, the releases, certainly out of the U.S. Strategic Petroleum Reserve, they'll go over about four months. But this conflict, I don't think, goes that long. I think we will have the Straits of Hormuz open well before. regardless, this oil shock could have consequences for everyday consumers well into the future.

The problem is that everyone in general is going to have to pay more for if you're going on vacation this summer, your plane tickets are going to be more expensive, filling up your gas tank, etc. So the cost of food, everything, you know, the World Food Program put something out where they were talking about because the supply of fertilizer is going to be cut. That means that farmers in general will use less fertilizer, which means reduced crop yields, which means more expensive food. It means people going hungry. Like the second and third order effects of this are enormous and far-reaching.

And that's something that we saw with the aftermath of the Russian invasion of Ukraine, and we're seeing an even larger disruption now as a result of this conflict. And traffic on the strait could take a long time to recover, even after the conflict ends. ship owners have to feel that their crews and cargo are truly safe. One analyst, Jared, spoke to, noted that even six months after the Houthi stopped their attacks on the Red Sea, traffic there still hasn't normalized. Taking a step back, Jared, what are the chances of this conflict ending soon? Is there any chance for negotiations? Right now, there are no direct negotiations happening.

There are third parties, the Gulf states themselves, have tried behind the U.S. scenes to try to defuse this crisis. That's something they've really consistently been trying to do since before the fighting started. But at the moment, it doesn't look like there's any hope of that. For one thing, the U.S. has sent mixed signals about how long this is going to continue. And while stopping the fighting could soothe global markets in the near term, there might be some far-reaching political consequences. Notably, a hostile regime in Iran could create security issues for U.S. allies in the region, possibly paving the weight for another devastating war.

There's also no indication that ending hostilities is going to be simple. Jared says the Israeli government has signaled that it wants to continue fighting. And then the Iranians themselves have a lot of incentive to continue using the leverage they have over oil markets in order to try to get an outcome that's more favorable to them and just to prove that they can outlast the Americans and the Israelis. Which means that reopening the Strait of Hormuz may require a ground operation to seize the Iranian coastline, according to Wall Street Journal reporting. That would mark a dramatic escalation to the conflict.

If this keeps going, how catastrophic could this really be for the world's oil markets? Would you be able to paint a picture? I think we're seeing that catastrophe unfold right now. You know, the markets were initially slow to price in a prolonged disruption to the Strait of Formos, and I think that right now the world is waking up to that to some degree. And the Trump administration has sort of seesawed in terms of how they say the war is going to unfold. Some of that messaging is likely geared towards

calming the oil markets. What our reporting shows is that there's just no quick and easy way to reopen the Strait of Form moves. And without doing that, there is no way to ease the main pressure on the market right now. It's not controversial to say that this is already a global economic disruption, and it's not going to be resolved anytime soon. That's all for today, Thursday, March 12th. The Journal is a co-production of Spotify and the Wall Street Journal.

Additional reporting in this episode by Rebecca Fung, Shelby Holiday, Summer Said, Yarislov Trofimov, and Joe Wallace. Thanks for listening. See you tomorrow.